Corporate Management Structure

A corporate management structure identifies who is responsible for different areas of a business, which allows the business to profit from economies of scale and coordinate their activities. For instance, a clothing manufacturer may have departments for men’s wear women’s, children’s and men’s wear, but a central marketing department. This divisional structure allows each department to focus https://chartinglogin.com/best-vdrs-to-test-now/ on a specific product or market, while sharing information in order to improve coordination. This type of structure can result in higher costs for employees and more duplicate work for purchasing supplies for different divisions.

Corporations are legal entities that have stockholders and require an established management structure in order to comply with regulations and protect the interests of shareholders. To this end, many companies have a multi-tiered structure of directors, shareholders and officers that oversee the company’s operations.

The top of the pyramid is the chief executive officer (CEO) who is accountable for approving on contracts and other legally binding actions on behalf of the company. A small company’s CEO could be the sole founder, director, officer or shareholder or in larger corporations they are appointed by the board of directors.

The board of directors consists of elected members from the shareholders, who are accountable for the direction and policies of a business. They choose the CEO, monitor his performance and plan succession. They also approve major business activities and transactions including contracting, asset purchases, sales, new policies, etc.